The currency pair stabilizes after UK election losses trigger calls for Prime Minister Keir Starmer’s resignation, fueling fiscal concerns.
GBP/JPY trades around 213.60 in Asian hours, paring earlier gains as the British Pound weakens amid a deepening UK political crisis. Over 80 Labour MPs have demanded Prime Minister Keir Starmer’s resignation following poor local election results, raising fears of increased fiscal spending to regain voter support.
Japan’s current account surplus surged to a record JPY 4,681.5 billion in March, exceeding expectations of JPY 3,879 billion and up from JPY 3,625.3 billion a year earlier. The data supported the Yen, though gains were limited by broader market caution.
The Bank of Japan’s April Summary of Opinions indicated policymakers may hike rates as early as their next meeting due to inflation risks tied to rising oil prices. The OECD also recommended Japan raise consumption taxes to boost revenue, while the BOJ is projected to lift short-term rates to 2% by 2027.